WorldWideTech&Science. Francisco De Jesús.
HTC saw its market capitalization overtake that of handset shipment leader Nokia, in a development that was seen to reflect HTC’s strength in the booming smartphone sector – where Nokia is losing ground rapidly.
According to Bloomberg, a 5.3 percent increase in HTC’s share price yesterday took its value to US$33.8 billion, ahead of Nokia’s US$33.6 billion.
The value of HTC’s shares have tripled in the past year, as its smartphone growth outpaced the market, while Nokia has seen its value slide – with a significant drop-off after it announced its alliance with Microsoft during February 2011.
It was noted that the figures as much reflect the expectations of the companies going forward as it does now – Nokia is still the bigger of the two in terms of operating profits and revenue.
However, it is expected that Nokia will struggle as customers look for more and more sophisticated handsets, and it transitions from its current Symbian OS platform to Windows Phone – a process that is expected to take several years.
The bulk of Nokia’s volumes also come from low price, low margin devices, which means its operating margin is pressured. In contrast, HTC is focused on the more lucrative premium device sector, without the burdens associated with delivering a mass-market handset portfolio – meaning it has healthier operating margins.
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